Chinese television shopping company Acorn International announced its third quarter financial results for the three months ended September 30, 2008 and says net revenues were USD75.7 million, an increase of 3.4% compared to USD73.2 million in the third quarter 2007.
Gross margin was 51.0%, compared to 50.3% in the same period of 2007, but an operating loss of USD6.7 million was incurred, compared to a USD1.0 million operating profit in the third quarter 2007. Impairment losses for the third quarter 2008 totaled USD12.0 million. Of this total, USD8.7 million consisted of USD1.1 million of impairment loss on intangible assets and USD7.6 million of impairment loss on goodwill. The remaining USD3.3 million reflects an other-than-temporary impairment of investment on one of two available-for-sale securities. The original cost of Acorn's investment on these two available-for-sale securities was USD10.0 million each.
The company also posted a net loss of USD10.8 million, compared to a net profit of USD4.5 million in the third quarter 2007.
"The third quarter was mixed for our business. The opening of the 2008 Beijing Olympics and the worsening of the global financial crisis both significantly impacted our business operations. While our collectibles business benefited from the Olympics, our CPS stock tracking software sales declined along with the domestic financial market decline. Despite the macro factors affecting our business, we continue to make positive strides in many of our other product lines. During the third quarter, our longstanding Babaka posture correction products continued to perform well, our third party banks sales expanded, and we even saw some recovery in our mobile handsets business following a revamped pricing and marketing scheme," said James Hu, chairman and CEO of Acorn International.
Acorn's cash and cash equivalents totaled USD157.1 million at the end the third quarter 2008, up USD9.6 million from that at the end of the second quarter 2008.